How Can A Self-Employed Contractor Use A Shop Space Condo?

Shop Space Condominium Complex

Shop Space Condominiums Do's and Don'ts For Self-Employed Contractors

If you are a self-employed contractor considering a shop space condominium, know what can be done in your space. If allowed, storing a work vehicle within a secure space at the end of the day could be a time saver.

The rising cost of real estate and construction has many small business owners and self-employed contractors looking for an alternative to buying or building a stand-alone building as their business grows. Investing in a commercial luxury shop space condo for your business is one option.

A shop space condo is a piece of real estate you own, typically in a complex. Sharing a building in a complex can offer the self-employed contractor plenty of advantages.

Let's examine the pros and cons of owning a shop space condominium and what to look for before purchasing one for your contracting business.

Identifying Your Needs

Before you consider purchasing a shop space condo, you should identify your needs as a business. Are you looking for a storage space/office? Are you a cabinetmaker in need of a fabrication shop? Identifying your needs will help you to focus your search on properties that are the right fit.

Many commercial shop space condos will have certain restrictions, for example, not allowing you to open a public showroom or prohibiting an auto repair shop. Do your due diligence, preferably with the help of qualified advisors (such as a commercial real estate broker.) Commercial condos are governed by local building codes, laws, and association rules that vary widely depending on where you live.

By identifying how you'll use your shop space condo, you can let your realtor know so they can direct you only to appropriate properties.

What to Look For When Shop Space Condo Shopping

Sharing a building with other businesses offers several benefits besides a lower cost of entry. Owners share many operating expenses in the form of a monthly association payment. These fees can include maintenance costs, insurance, property taxes, and heating. A complex is commonly run by a management company, saving owners the hassle of operating a building and their businesses. Consider the following items when doing your due diligence.

Read All Disclosure Documents

The condo corporation must provide you with disclosure documents that clearly outline bylaws, rules, and financial statements. Make your offer conditional upon receiving and having time to examine any paperwork.

Make Sure You Can Operate Your Business in The Condo

Some types of businesses may be excluded from operating in the space, whether because of local zoning laws or condominium restrictions.

Know Your Neighbors

Besides conducting a site inspection of any potential purchase, look at who you will be sharing the building with and the exterior of the building. What might physically affect your ability to operate out of the space? Some examples could include excessive noise, fumes or odors, or trouble spots on the property.

Consider Parking and Access

Is there adequate parking for any employees who may be working on-site? Is there dedicated parking, and does it meet your needs? Can you park your vehicle in the building?

Know What You're Responsible For

Look closely at the disclosure documents. All owners own and maintain the roof, exterior, and parking lot. But what about the specifics of your unit, like doors and windows? Understand what it is that you are responsible and paying for.

The Benefits of a Commercial Shop Space Condominium

Owning a commercial shop space condo can be an appealing option for a growing business. It is an especially attractive and beneficial option for those in the building trades like contractors, electricians, painters, and plumbers. A commercial condo offers you the benefits of ownership without the commitment of purchasing an entire building. Here are some pros and cons of owning a shop space condo for your business.

The Pros

Lower Entry Cost – Reduced upfront investment compared to buying a stand-alone building is a key benefit of purchasing a shop space condo. If you operate a small business, and have limited capital, a shop space condo might fit your budget and business needs.

Customization and Control – Unlike leasing, owning a commercial condo allows you greater control over your investment, including the interior design and layout. Do you need in-door parking, shop space, a small office, a bathroom, and a kitchenette? You can build the space to meet your specific needs. Is there a compatible business looking for space? If you own your shop, you can rent a portion to lower your costs.

Limited Maintenance Responsibilities – As a condo owner, maintenance costs are divided among the individual owners and the condo association. You are responsible for maintaining your physical space. The association oversees the maintenance of all common areas and exterior elements. Sharing these expenses can lower your operational costs significantly!

Access to Shared Amenities – A commercial shop condo complex may offer shared amenities, including conference rooms, parking facilities, and more. Access to these shared amenities can enhance the overall value of the property.

Build Equity – Owning a shop condo space allows you to build equity over time. If the property appreciates in value, owners may enjoy potential capital gains when they decide to sell. Equity-building is a valuable long-term investment strategy!

The Cons

Condo Association Fees – Along with a mortgage, you will pay condo association fees for maintenance, insurance, and shared amenities. Association fees will vary based on the complex. Consider also that these fees mean you don’t need to do that work yourself — you are paying to get it done.

Restrictions and Bylaws – Commercial condos are governed by specific rules set by the association and regulations set by the city or town where it is located. Restrictions may include how you use and modify your space, potentially limiting some activities. You’ll need to comply with the zoning codes of the city of village anyway, and generally the condo restrictions mirror the municipal zoning code.

Shared Responsibilities and Special Assessments – As part of a development, owners share responsibility for maintaining shared spaces. In the event of a dispute, decision-making may divert to the board or association. In some situations, for example, if the association faces a financial challenge or requires substantial repairs, assessments may be levied on all owners. These unexpected costs can impact operating budgets. Again, the assessments represent a feed that you’d pay as part of your rent or maintenance costs elsewhere, so just be aware to budget for everything.

Freedom From Renting

More than likely, owning a commercial condo for your business makes more sense than the uncertainty of renting. Before purchasing a space, do your due diligence to ensure that owning a shop space condo aligns with your business goals and finances. By choosing the right condominium complex, you can make the most of owning a commercial condo for your contracting business, leveraging all the advantages of property ownership!